Financial Instruments

A detailed Summary of Financial Instruments


Major sources of bank funds have changed in the past thirty years. This is due directly to the Federal Reserve's Regulation Q, which places ceiling limits on deposit rates. Banks would increase competition by offering higher interest rates than another bank. To keep bank deposit transactions stable, Regulation Q was imposed. Also, interest rates on assets increased greatly during this time.

Individuals and business firms then, as a result, are willing to hold only the amount of transactions deposits they deem necessary for day-to-day payments. If more is held, then more interest must be paid out to the Fed.



Some common words found in the essay are:
Reserve's Regulation, , business firms, bank's assets, bank's assets liabilities, assets liabilities, transactions deposits, value bank's assets, loans floating-rate loans, loans floating-rate, bankers usually, floating-rate loans, value bank's, regulators banks,

Approximate Word count = 422
Approximate Pages = 2 (250 words per page double spaced)

Category: Miscellaneous

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